Shareholders' meeting starts for merger of 2 Samsung affiliates

A shareholders' meeting began on Friday morning to vote on the all-stock merger of two major Samsung Group affiliates, a move aimed at a smooth transfer of power from Chairman Lee Kun-hee to his only son Lee Jae-yong.

Cheil Industries, the de-facto holding company of Samsung Group, South Korea's largest family-run conglomerate, unanimously approved the takeover of Samsung C&T, the group's construction and trading unit.

Samsung C&T started a shareholders' meeting to vote on the 8.9 trillion won (7.8 billion U.S. dollars) of all-stock deal, and the result is expected to come out in the afternoon.

The two Samsung affiliates announced the acquisition plan on May 26 of Samsung C&T by Cheil Industries. If the merger is approved, a new entity would be launched on Sept. 1.

The shareholders' meeting of Samsung C&T has been on the spotlight as U.S.-based hedge fund Elliot Associates, the third- largest shareholder of the construction unit, expressed opposition to it.

Elliot with a 7.12 percent stake in Samsung C&T filed two lawsuits, including one seeking to block the convening of the shareholders' meeting and the other to prevent Samsung C&T from selling 8.99 million treasures shares, or 5.76 percent stake, to its friendly shareholder KCC Corp.

Courts ruled in favor of Samsung in the two suits, and the appeals courts dismissed Elliot's request in both cases.

Samsung C&T should win approval from at least two-thirds of shareholders present at the shareholders' meeting to successfully merger with Cheil Industries. Endi